Zynga Chief Talks IPO, Lessons Learned

Zynga Inc. Chief Executive Mark Pincus ended 2011 as the face of an overhyped Web initial public offering. Now he wants to show the hype was justified.

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Zynga CEO Mark Pincus, seen in an October photo, believes the company's IPO was successful.

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Early last year, his San Francisco company, which makes social games such as "FarmVille" that are played on Facebook, was on track for one of the hottest initial public offerings of 2011. But when Zynga finally went public last month, its stock price dropped 5% on the first day of trading and has since consistently traded below its $10 offering price.

Mr. Pincus, 45 years old, also came under scrutiny for his role in asking some early employees to renegotiate their stock compensation packages. Some saw the move as undermining Silicon Valley's long-held tradition of young entrepreneurs signing up at start-ups for low salaries but with the hope of an eventual payoff from big equity packages.

Now Zynga faces questions of whether it can keep producing new gaming hits, even as it works to move away from its dependence on Facebook.

With the quiet period surrounding Zynga's IPO now over, Mr. Pincus sat down to discuss Zynga's culture, its stock price, and the potential for future revenue growth and online gambling.

WSJ: Were you happy with how Zynga's IPO turned out?

Mr. Pincus: Our goals were we want to raise a billion dollars. Through going public, we wanted to add some more great long-term investors to the company. All of that was successful.

WSJ: But Zynga's stock price sank below the IPO price on the first day of trading. Who or what do you blame for that?

Mr. Pincus: I don't blame anybody because from our standpoint, we think it was successful. It was many times larger than the other tech IPOs that had just happened recently. We think we're now well positioned to move forward in the future.

WSJ: Zynga's stock price is still below $10. Did the company go public at the wrong time?